LEAN in Pharma — It’s Not Just for Manufacturing Anymore

LEAN principles are well known in pharmaceutical manufacturing where they have gained popularity in reducing inventory and increasing productivity — often without the need for capital investment. But, in spite of these benefits, some LEAN programs become stale over time because they fail to innovate — they continue to leverage the same tools in a predictable way. During the last two decades, companies in the financial services, information technology, and healthcare industries have used LEAN to their advantage, proving that it has significant value outside of just manufacturing. But the pharmaceutical industry is only now beginning to fully embrace this trend, recognizing LEAN’s potential to transform processes well beyond the manufacturing organization.

Where are the opportunities to go lean?

One of the most basic principles of LEAN is to remove non-value added elements from work. In a manufacturing setting, it’s easy to spot these opportunities — excess inventory cluttering workstations, people waiting for raw materials, product discards, etc. You can see, and often touch them — they’re obvious targets. Now consider an example outside the shop floor. In a clinical development environment, teams are diligently working and everyone is busy. So, where are the opportunities?

Chances are good that there are a multitude of areas to improve the work, they are just more difficult to see.

Delayed Decision Making: In many pharma organizations, decision-making can be slow. While the clinical team is waiting for approval to move on to their next assignment, they stay busy by filling their time with other work. Although they are productive, a high priority project may be falling behind schedule because the team is forced to wait for a decision.

Mis-Aligned Skills or Activities: If the clinical team lacks a good resource planning process, the organization may be unable to effectively match skilled employees with work assignments. They may be either over-skilled or under-skilled for the work they have been asked to do. This can lead to employee dissatisfaction, poor quality work, and even turnover.

Redundant Work: If clinical systems, processes, and data aren’t integrated effectively, employees may spend needless time entering and analyzing information in multiple places. This lengthens the overall time to complete projects and negatively impacts quality.

Over-engineering: If regulatory requirements and standards aren’t clear to clinical teams, they may over-complicate the work by adding unnecessary steps while missing others that are critical. This adds to the project scope, schedule and budget. More importantly, it may jeopardize regulatory compliance and credibility with auditors.

Finding Solutions

Beyond the nuances of “seeing” opportunities, other unique aspects of non-manufacturing pharma environments may require employees to flex their problem-solving approach:

Information-based employees, such as Supply Chain planners or Information Technology teams are often located across the globe. While they may work together virtually on a particular process like supply / demand planning or systems development, in many cases, they’ve never met and they rarely communicate. Sadly, collaboration is often weaker due to this distance.

Information-based employees, especially in a pharma environment, are more likely to work on processes across the value chain – processes that typically involve multiple departments and different managers. To add complexity, each department across the organization may have very different priorities and objectives as well. So, when challenges arise, solving them is more politically-charged.

Often, these types of employees don’t have visibility to the end result of their work. Unless they are the last person to touch the work before it goes to the internal or external customer, they may have difficulty making the connection between their actions and the resulting outcomes.

The kaizen, popular with Lean Six Sigma practitioners, is a cross-functional problem-solving session. It’s also a powerful tool to overcome challenges similar to those listed above. In a kaizen, employees working on the same process gather together for one or more days to map in detail how things are done today. Their goal is to jointly identify opportunities to improve speed and quality, and rapidly define the new process. Kaizens routinely result in processes that are 20% faster, with higher output and better quality. These significant improvements are possible because:

Mapping the process brings attention to unnecessary complexity and steps that aren’t needed, so the work can be simplified.

Collaboration and communication improves, as employees understand and appreciate what their colleagues do.

Cross-functional teams discuss the issues together, so differing opinions come to light quickly and can be addressed.

Teams see the end-to-end process and so feel a tighter connection to the internal or external customer.

Employees feel motivated to realize the solution because they were actively involved in defining it and will remain committed to recommending future improvements.

While taking people out of their day-to-day work for a kaizen can be challenging, the time investment quickly pays off based on the speed and quality improvements that are realized. In manufacturing specifically, shutting down a production line for a kaizen may simply not be an option. Due to this constraint, manufacturing change agents often focus on individual coaching or kata rather than kaizens. But change agents in a non-manufacturing environment have a unique opportunity to leverage the kaizen approach.

Delivering Value

Another aspect of LEAN that requires innovation is the way in which we describe the value of LEAN. Too frequently, change agents talk about improvements as “cutting waste”. In reality, no one likes to think about what they do as “waste”, and “cutting” is often associated with headcount reduction. Both of these mental images will cause employees to disengage.

Mature transformation programs will quantify cost, quality, and speed improvements in the processes they change and the impact to the overall company. They will also underline the employee benefits: reduced frustration, better work-life balance, more control over their own work, etc.

But, there is one additional element that is often missing from LEAN dashboards. In non-manufacturing environments, employees generally have more diversity in their work. If we make a process less labor-intensive through LEAN, the employee now has extra time to devote to something else. What can the employee do with the extra time? Suddenly, the discussion is elevated beyond cost-reduction to something much more compelling — value. For many companies, this is the difference between incremental change and true transformation. For example:

Sales: By cutting time spent on the administrative aspects of selling, sales forces can spend more time nurturing relationships with healthcare service providers.

IT: If IT projects are delivered in a more timely way, IT management teams can spend more time partnering with the business to identify areas where technology can fuel innovation – potentially identifying areas where systems integration can provide more timely visibility into recurring quality problems that jeopardize regulatory compliance.

Finance: Financial analysts can spend less time creating reports and more time considering important trends – perhaps spotting emerging variations between demand forecasts and actual sales, and helping to reduce inventory discards and interruptions to supply.

As you begin the journey of unlocking the benefits of LEAN transformation in functions beyond manufacturing, there are three key principles to keep in mind:

Dig deeper to investigate opportunities beyond what is visible to the eye

Leverage cross-functional problem-solving sessions (kaizens) to enable employees to articulate in detail how work is done and redesign their own work.

Express LEAN benefits broadly based on value generation as well as cost-reduction